This paper analyzes production, hedging, and speculative decisions when both futures and options can be used in an expected utility model of price and basis uncertainty. When futures and option prices are unbiased, optimal hedging requires only futures (options are redundant). Options are used...

The deregulation of railroads by the Staggers Rail Act of 1980 reversed nearly a century of prohibition of contracts between railroads and shippers/receivers. This paper presents an analysis of the impact that railroad contracts have on grain bids to corn, wheat, and soybean farmers. The...

A hypothesis that hedging will not be an important factor for risk-averse investors when uncertainty is caused by futures prices and when basis risk is not associated with futures price is defended. Under a condition of constant absolute risk aversion (CARA), increments in futures prices will...

The local rural road and bridge system is under physical stress from heavy and wide farm vehicle travel. It is also under financial stress from the prospect of declining revenues for maintaining and rebuilding the system. There are significant research opportunities for agricultural economists...

Participation in federal crop insurance programs has been encouraged through premium subsidies. The current subsidy depends on contract features as well as coverage levels. This type of subsidy rule causes farmers to choose contract designs and coverages that are not efficient for managing risk,...

Identifies the characteristics of grain elevators that had railroad contracts during 1983-1985 using a logistic model designed for complex survey designs. Factors which influence the probability of a grain elevator participating in an origin contract with a railroad; Use of data from Kansas and...

A survey of rural Michigan banks found that building good customer relationships is an important goal. The financial success of efforts to build relationships depends on the customer loyalty associated with friendly relationships. Customer loyalty was investigated in a survey of financial...